HTH drives Incline Global Management in June. VRX drags.
Incline Global Management returns an estimated -1.2% for June 2015 - the fully hedged version returns -0.27%
Incline Global Management generated a -1.2% return on their publicly disclosed long portfolio for the month ending June 2015, underperforming the S&P500 by 121 basis points (bp). On a hedged basis, the portfolio would have returned -0.27% StockAlpha over the same period. Incline's StockAlpha reflects the return of the net return if each security in their portfolio was hedged with a sector ETF, such that the resulting portfolio was market, beta and sector neutral. StockAlpha in the Financials sector contributed the most to StockAlpha during the month.
Positive Contributors to Incline Global's Returns
Incline Global’s position in Hilltop Holdings Inc. (HTH) contributed the most to the performance of the manager’s long-portfolio during the month. Over the month of June 2015, Incline's 5.4% position in Hilltop Holdings Inc. (HTH) increased in value by 11.6%, contributing 0.63% (5.4%*11.6%=0.63%)to the long portfolios overall return. Looking at Incline's portfolio through a fully hedged StockAlpha lens, the holding of Hilltop Holdings Inc. (HTH) also provided the largest contribution to fully hedged returns. Hilltop Holdings Inc. (HTH) returned 11.6% during the month compared to the Financials sector, which returned -0.5%. As a result, after taking into account Hilltop Holdings Inc. (HTH)'s beta relative to its sector, the position contributed 0.7% of StockAlpha to the Incline’s monthly performance.
Negative Contributors to Incline Global’s Returns
Much of the drag on Incline’s long-portfolio during the month can be attributed to the holding of Valeant Pharmaceuticals International Inc (ONT) (VRX). Over the month of June 2015, the manager's 5.3% position in Valeant Pharmaceuticals International Inc (ONT) (VRX) returned -8.4%, contributing -0.44% (5.3%*-8.4%=-0.44%)to the long portfolios overall return. Looking at Incline's portfolio through a fully hedged StockAlpha lens, the holding of Liberty Global Inc Class A (LBTYA) provided the most negative contribution to fully hedged returns. Liberty Global Inc Class A (LBTYA) returned -6.7% during the month compared to the Cons. Disc. sector, which returned 0.6%. As a result, the position contributed -0.4% of StockAlpha to the manager’s monthly performance.
Overlap with other hedge funds
Among Incline Global’s top 10 largest positions, Actavis Plc (ACT) is the name that is owned by most other hedge funds. 26.5% of hedge funds within Symmetric's universe had a position in Actavis Plc (ACT) as of March 31, 2015, making it a consensus name relative to other stocks. Incline initiated its position in Actavis Plc (ACT) 1.25 years ago. Other hedge funds that have significant ownership stakes in Actavis Plc (ACT) include Ratan Capital Management Lp (16.4% position initiated 1 year ago), Sachem Head Capital Management (15.8% position initiated 0.5 years ago) and Oskie Capital Management Llc (11.5% position initiated 1 year ago). Overall, Incline's book is contrarian, with the average position held in the portfolio held by 9.7% of hedge funds. Use Symmetric to surface managers with unique sources of alpha and flag those that may be in trouble.
